EY today set out plans to capitalise on the $5trn private equity (PE) market, with a view to bolstering its PE offerings by investing $1bn (£800m) into its business over the next four years.
The Big Four accountancy firm said it aims to solidify its “leading market position” by investing the $1bn sum into expanding its capabilities in dealmaking, portfolio transformation, and ESG.
The firm said veteran EY partner Bridget Walsh lead the initiative after taking on a new role as head of EY’s global PE business, starting on 1 July 2022.
EY’s plan come as the PE market has more than doubled over the previous decade, from nearly $2trn in 2010 to more than $5trn today.
The meteoric rise of the asset class last year saw the value of PE deals surpass $1trn for the first ever, on the back of a boom in the market, driven by demand from investors for alternatives to mainstream stocks and bonds.
Looking forwards, the PE market is also set to continue growing at a rate of around 15 per cent per annum, as family offices and high-net worth individuals (HNWIs) continue piling into the 50-year-old asset class.
The announcement come as EY is reportedly mulling over plans to spin off its advisory business and float it on the stock market, as a means of escaping the conflicts-of-interest that have plagued the Big Four accountancy firms for years.
The plans could see EY float its tax, consulting, and deals advisory business on the stock market, via an initial public offering (IPO), in a bid to separate out its audit operations into an entirely distinct firm.
The prospect of a split comes as the Big Four have come under mounting public and political pressure in the wake of a series of major accounting scandals, involving some of the UK’s most prominent companies, including Carillion, Rolls Royce, and Patisserie Valerie.